Last week turned to be a good one for the Euro. Surprising to many, yours truly included, the common currency exploded after the EMU finance ministers approved the second bailout for Greece. Since the EUR had been steadily gaining ground leading to the announcement, I thought that would be a “buy the rumor sell the news” situation. Obviously, things did not work out that way, leading to a losing trade after the minor profit early in the week.

I was looking for another short opportunity, on breakouts under minor lows, under 1.3200. The sell order adjusted, moved higher to 1.3197. It started good enough, unfortunately, the news of bailout hit the wires and the Euro exploded to the upside. My trade was headed, gutted and filled by the market within one minute of the announcement. At least I had a good sense to have a stop loss order, which limited the pain to only 30 pips.

After the initial surge, the EUR-USD settled down for couple of days. The volatility was gone, the price drifted sideways, giving it appearance of a cup with a handle patter, which is bullish. Cups are reasonably reliable as chart formations go, of course, the timing is always tricky. Here it presented two buying opportunities. One at 1.3300, on the initial bullish breakout and the second possibility came at 1.3345, when the handle was completed.

I became a little impatient, opting for the first option, in another account. This particular trade delivered what was expected. My objective was 70 pips, which proved to be far short of potential. Still, winning trade is never bad, so no complaints. By the end of Friday, the EUR-USD rallied to 1.3486. This is probably overextended in the short-term, but that is a subject for another post. Have a great weekend!

Mike K.